A local software company must invest at least USD 20,000 per year per employee above “on hand” income to match a $30,000 offer from a company not located in Argentina that does not make contributions or pay taxes.
Let us realize that those 20,000 dollars are genuine income to the National State that he stops receiving, that is, tax revenues are reduced, given that a monotax would only contribute about 1,200 dollars a year. The difference is more than significant.
We understand that the new plan that Congress is evaluating for the Knowledge Economy industry, called “tech monotax”, seeks that freelancers “formalize” their activity, but Above all, he is looking for foreign currency to enter. This as long as a significant number of freelancers sign up for this new regime.
Now, is it beneficial for the State? The answer is clearly negative. The collection of a monotax will be almost 20 times lower to what is collected in a job in a dependent relationship, with personal, employer contributions, social work, retirement and income tax of the 4th category.
Well, it is not minor that we are talking about this issue, in 2023 it is expected that the sector will export USD 10,000 million and consolidate itself as the third largest exporter complex in Argentina. Furthermore, the government estimates that the regional demand for programmers will be 350,000 in the next five years.
To generate that “new job” companies are needed to establish an ecosystem for talent training and growth, which can only be achieved by working as a team. This is the only way to be able to grow that immense number of Argentines of all ages who are receiving training today in our country and who enter this industry as trainees either juniors.
But are we paying due attention to what would happen if companies based abroad were motivated to hire more and more talent trained in our country? Are we foreseeing how this measure will impact the national economy? What do we prefer to be: creators of knowledge or users of knowledge?
If the most qualified people become employees freelancer of companies not located in Argentina, only a significantly lower value will be exported than if that talent is used in companies that generate services, products and intellectual property in our country for export.
We estimate 5 times more foreign exchange earnings from exports made by companies than foreign exchange earnings from freelancers.
The Software industry is the activity that generated the most formal employment in Argentina between the third quarters of 2019 and 2021, doubling the automotive industry, for example.
At CESSI we believe that the monotax for workers in the IT sector It is a form of “light” contracting to generate some flow of foreign exchange to alleviate the short term. But it is necessary to add certain precautions that protect the value of the national industry and its development.
We understand that, if changes are to be made to the scheme, equal conditions must be guaranteed for Argentine companies when hiring employees in a dependency relationship, since the Knowledge Industry is one of the 4 strategic sectors for Argentine productive development.
The implementation of the tech monotax is a short-term measure that will generate fewer exports in the future. Our dream of being 5% of GDP in 10 years it can become just a “nice illusion” that we had at some point in our history.
We insist, as a software industry, made up of thousands and thousands of companies throughout our country, we want equal conditions to hire and retain the most valuable: our talent.
President of the Chamber of the Argentine Software Industry (CESSI)
Source: Ambito
